The Oil & Gas Conference August 11, 2008 Exhibit 99.1 |
1 Forward Looking Statements This presentation includes forward-looking information that is subject to a number of risks and uncertainties, many of which are beyond the Company’s control. All information, other than historical facts included in this presentation, regarding strategy, future operations, drilling plans, estimated reserves, future production, estimated capital expenditures, projected costs, the potential of drilling prospects and other plans and objectives of management is forward-looking information. All forward-looking statements speak only as of the date of this presentation. Although the Company believes that the plans, intentions and expectations reflected in or suggested by the forward-looking statements are reasonable, there is no assurance that these plans, intentions or expectations will be achieved. Actual results may differ materially from those anticipated due to many factors, including oil and natural gas prices, industry conditions, drilling results, uncertainties in estimating reserves, uncertainties in estimating future production from enhanced recovery operations, availability of drilling rigs, pipe and other services and equipment, availability of oil and natural gas transportation capacity, availability of capital resources and other factors listed in reports we have filed or may file with the Securities and Exchange Commission. This presentation also includes information on reserves potentially recoverable through additional drilling or enhanced recovery operations. Non-proven estimates are generally not permitted to be disclosed in SEC filings and are subject to a substantial risk of not being realized. |
2 Company Overview Completed IPO in May 2007 (NYSE:CLR) ~$8 billion market capitalization Founded 1967 by Harold Hamm, Chairman & CEO 2 nd largest oil producer in the Rockies Organic growth strategy focused on unconventional resource plays L3 years reserve adds – 99% through the drill bit 2007 daily production 29,099 boepd > 2X 2004 level of 14,121 boepd Focus on hz drilling: >500 hz wells drilled 82% of proved reserves / 76% of production from unconventional resources ~1 million net undeveloped acres concentrated in unconventional resource plays Strong financial results $245MM in 2Q08 EBITDAX – an increase of 125% over 2Q07 $220MM of bank debt outstanding as of 6/30/08 100% of oil and gas production unhedged |
3 $116 $285 $372 $427 $470 2004 2005 2006 2007 1H 2008 Investment in Asset Base EBITDAX ($mm) 14,121 19,751 24,707 29,099 31,623 2004 2005 2006 2007 2Q 2008 Production (boepd) Cash used in investing activities ($mm) $184 $245 $30 $130 $53 $21 $207 $13 Red River Units Bakken Other Rockies Woodford Other Mid-Con Gulf Coast Land & Seismic Other 2008 Capex by Region - $883 MM $73 $134 $325 $483 $276 2004 2005 2006 2007 1H 2008* * Excludes $71MM for acquisitions. |
4 Financial and Operating Summary 1 Excludes impact of price commodity derivative contracts covering period from August 2007 through April 2008. 2 See page 30 of second quarter Form 10Q and earnings release for a reconciliation of net income to EBITDAX. 3 Operating statistics per boe sold. Oil sales volumes are 35 Mbbls more than oil production volumes for 1H 2008; and 221 Mbbls and 21 Mbbls less than oil production volumes for 2007 and 2006, respectively. Years ended December 31, 2005 $52.45 $6.93 15,638 24,674 19,751 $285,344 $50.19 7.32 2.22 2.43 $11.97 $38.22 2006 $55.30 $6.08 20,493 25,274 24,707 $372,115 $52.09 6.99 2.48 2.24 $11.71 $40.38 2007 $63.55 $5.87 23,832 31,599 29,099 $469,885 $58.32 7.35 3.13 1.92 $12.40 $45.92 1H 2008 $104.43 $8.25 24,080 41,098 30,930 $426,738 $92.34 8.83 5.38 2.46 $16.67 $75.67 Realized oil price ($/bbl)¹ Realized natural gas price ($/Mcf) Oil production (boepd) Natural gas production (Mcfd) Total production (boepd) EBITDAX ($000’s)² Key Operational Statistics³ Average oil equivalent price¹ Production expense Production tax G&A (ex non-cash equity compensation) Total cash costs Cash margin 2004 $38.85 $5.06 10,104 24,093 14,121 $116,498 $36.45 8.49 2.39 2.02 $12.90 $23.55 |
5 Operational Overview Red River Units 50% Bakken Field 25% Other Rockies - 7% Mid-Continent 11% Gulf Coast <1% Total proved reserves (12/31/07) = 134.6 MMboe 74% PDP / 77% oil / 12.7 R/P / Operate 93% of PV-10% Unconventional 82% Red River Units 43% Bakken Field 27% Other Rockies - 8% Mid-Continent 14% Gulf Coast 2% Avg. daily production (Q2 2008) = 31.6 Mboepd Unconventional 76% 1,306 net producing wells with >1,000 net drilling locations Mid-Continent Proved reserves: 24.3 MMboe Gulf Coast Proved reserves: 0.3 MMboe Rockies Proved reserves: 110.0 MMboe Proved Reserves by Geography Production by Geography Woodford - 6% Woodford - 7% Gulf Coast Proved reserves: 0.3 MMboe Rockies Proved reserves: 110.0 MMboe Regional office Headquarters Counties with acreage holdings are highlighted |
6 Key Drilling Projects Development (36% 2008 D&C capex) Red River Units: 50% proved reserves and 43% production Montana Bakken Shale: 20% proved reserves and 20% production Impact plays (48% 2008 D&C capex) North Dakota Bakken Shale: 376,000 net acres Oklahoma Woodford Shale: 46,000 net acres Estimated exit rate 43,000 boepd (36% increase over 2Q 2008) 13 operated drilling rigs at Jan. 2008 29 operated drillings currently, with 35 planned by year end Red River Units MT Bakken ND Bakken Arkoma Woodford Counties with acreage holdings are highlighted Regional office Headquarters Development Impact Plays |
7 CLR Unconventional Resource Plays ~1,000,000 net acres in unconventional plays and growing Shale Basin Overthrust Belt Marfa Woodford/ Barnett – 67,000 Anadarko Woodford – 95,000 Atoka – 32,000 Lewis – 27,000 Arkoma Woodford – 46,000 Haynesville – 20,000 New Albany – 46,000 Marcellus, Rhinestreet, Huron – 88,000 Bakken – 529,000 Red River – 77,000 |
8 Rocky Mountain Operations ND Bakken |
9 Red River Units Cedar Hills Units: the 13th largest onshore L48 oilfield Development started in 1995 with horizontal drilling Enhanced recovery operations began in 2003 CLR: 67.9 MMboe proved reserves 13,551 net boepd in 2Q 2008 Implementing infield horizontal drilling and re- entry drilling program to accelerate production and enhance sweep efficiency Developing Cedar Hills on 320 acre / producer Forecast peak at ~21 net Mboepd in late ’09 $184MM in 2008 capex / 5 to 6 drilling rigs Haley Prospect 77,000 net acres Extension of Red River B 95 square miles of 3D being acquired Cedar Hills North Unit Cedar Hills West Unit Buffalo Units Medicine Pole Hills West Unit Medicine Pole Hills South Unit Medicine Pole Hills Unit 25 Miles 25 Miles Haley |
10 Bakken Shale Largest unconventional oil resource play in the L48 U.S. ~4B boe technologically recoverable reserves (USGS) Play is being developed through hz drilling and advanced fracture stimulation CLR is largest leaseholder with 529,000 net acres Currently have 13 operated rigs drilling, increasing to 16 by year end 8,445 net boepd in 2Q 2008 70+ rigs operating ConocoPhillips EOG Resources Hess Marathon CLR acreage Horizontal Bakken producer Williston Basin Outline of potential Bakken production |
11 Richland County, MT Bakken Joann 1-32H (83% WI) Three Forks/Sanish test – late 3Q08 spud Finnicum 1-25H (48% WI) – 228 boepd Lea Joe 1-1H (63% WI) – 609 boepd Constance 3-7H (73% WI) – 315 boepd Marla 3-35H (95% WI) – 236 boepd Swenseid 3-9H (95% WI) – 336 boepd 320-acre single lateral Bakken well CLR acreage 640-acre tri-lateral Bakken well Three Forks/Sanish test location |
12 Bakken Shale Geologic Cross-Section 20’ 60’ 40’ 120’ Upper Bakken A Three Forks Lodgepole Middle Bakken Lower Bakken B Sanish Sanish Dolomite/Silty Dolomite Shaley Limestone/Limey Shale Sand Shale Over-pressured, oil bearing rock that is both source and reservoir for the oil Upper Bakken Shale Highly organic (up to 20% TOC) Brittle due to high silica content Middle Member Varies from dolomite, sand, shaley lime and shale across the basin Porosity is low, averaging 5% Lower Shale Similar to Upper Shale Micro-fractured due to oil generation Macro-fractured locally due to tectonics Depths 8,500’-11,000’ B Approx. limit of thermally mature Bakken MT ND Bakken Pinch-out A ND Bakken wells drilled since 12/2003 |
13 ND Bakken – Recent Activity THREE FORKS HORIZONTAL CLR OPERATED CLR NON-OPERATED NO CLR INTEREST First and second Three Forks/Sanish wells completed in 2Q08 Bice 1-29H (44% WI) in Dunn Co. (693 gross boepd) Mathistad 1-35H (40% WI) in McKenzie Co. (1,260 gross boepd) Drilling program now targeting TFS Expect to increase operated rig count from 10 currently to 12 by year end in ND Gross wells completed Net wells completed Gross 7-day avg. IP rate 2Q08 33 8.7 513 boepd 1Q08 13 3.7 455 boepd |
14 Interval -- Three Forks/Sanish to Top of Middle Bakken Northern 2/3s of ND Bakken acreage has 50’ or more separation Given the low porosity/perm of the rock, our theory is that the TFS is a separate reservoir from the Middle Bakken Exception: Areas where the interval thins Exception: Areas where there is significant vertical fracturing due to tectonics CLR-operated Three Forks/Sanish wells being drilled or completed. CLR-operated Three Forks/Sanish wells in production. Omlid 1-7H Maryann 1-15H Kirkland 1-33H Croff 1-2H Mathistad 1-35H – 1,260 boepd Bice 1-29H – 693 boepd Ronholdt 1-16H Oscar 1-25H Glasoe 1-18H Elveida 1-33H Arvid 1-34H Viola 1-7H Omar 1-1H Malcolm 1-29H Morris 1-23H Gale 1-32H Skachenko 1-31H Sloan 1-17H |
15 Arkoma Woodford Shale Unconventional gas resource play 40+ industry-operated rigs (Newfield, Antero, Devon) in the Arkoma Woodford CLR: 46,000 net acres Significant reserve and production growth potential $130MM in 2008 capex Increasing from 5 operated drilling rigs currently to 7 by year end Acquired 26 square miles of 3D in Salt Creek and acquiring 55 square miles in E. McAlester Caney Shale upside 12 miles SALT CREEK exploratory EAST MCALESTER exploratory 4-well Simul-frac Avg. 3.5 MMcfd/well 2-well Simul-frac Avg. 6.8 MMcfd/well 2-well Simul-fracs Scheduled 3Q08 CLR Operated WOC CLR Operated Producer CLR 2008 Wells to be drilled Woodford Producer CLR Acreage Inset: CLR 2008 Completed Wells Inset: CLR 2008 Wells to be drilled ASHLAND development |
16 ND Bakken & Arkoma Woodford 1. CLR internal economic model, based on gross reserves per well of 400,000 boe for ND Bakken and 3,000 MMcf for Woodford. 2. Assumes 1 well per section for ND Bakken and 8 wells per section for Arkoma Woodford. Reserve potential Net reserves/well Net potential unbooked locations Reserve potential Net boe/well Estimated avg. D&C Pre-tax IRR @$80/bbl & $8/Mcf @$100/bbl & $10/Mcf ND Bakken 325,000 boe 546 177 MMboe 325,000 boe $5.8MM 40% 69% Arkoma Woodford 2,400 MMcf 541 1.3 Tcf 400,000 boe $5.0MM 69% 122% Totals 1,087 387 MMboe |
17 Trenton/Black River – Hillsdale Co., MI Single largest field in Michigan -- Albion-Scipio and Stony Point Field have produced ~190 MMboe. CLR: 47,000 net acres 10 gross (6.8 net) wells drilled with 90% success rate as of July 2008 Have applied for DEQ ruling on increased production allowable, with response expected Sept./Oct. 3D seismic being acquired in preparation for multi-well drilling program in 4Q Albion-Scipio Field, discovered in 1956 5 Miles Albion-Scipio Field Stoney Point Hog Heaven 3-D 6.5 mi. Chicago/Norad 3-D 20 mi. (processing) Dog Leg 3-D 3-D 4.5 mi. Kittyhawk 3-D Fred Bear 3-D (proposed) Young 11-34 (testing) Pridgeon 3-3 (planned hz) Lindemann 1-36 – testing Clark 1-36 – 5 BOPD McArthur 1-36 – 110 BOPD Boardman 1-1 – 200 BOPD Anspaugh 1-1 – 110 BOPD Wessel 1-6 – 110 BOPD Wessel 2-6A– 110 BOPD Wessel 1-1 – dry hole |
18 Summary High quality, proved reserve base Crude oil-concentrated, long-lived, high operated % Track record of low cost growth through the drill bit L3 years cash flow from operations $1,075MM vs. $942MM cash invested Focused on horizontal drilling in unconventional resource plays Low risk production growth in Red River Units ~7,500 boepd expected production growth over next 1+ years Significant future production and reserve growth opportunities in several emerging plays 387 MMboe unbooked potential reserves in ND Bakken & Arkoma Woodford vs. 2007 year-end reserves of 135 MMboe Large acreage position in other emerging shale plays, including Anadarko Woodford, Marcellus, Rhinestreet, Huron, Atoka, Haynesville and others Low cash costs with one of the highest net operating margins Significant valuation and competitive advantage |